Vietnam's first LNG terminal Hai Linh to conduct test run late 2020

Singapore — Vietnamese oil company Hai Linh Co Ltd has completed construction of its LNG terminal in the southern province of Ba Ria-Vung Tau and a test run was expected by the end of 2020, a source with knowledge of the matter told S&P Global Platts.

Hai Linh's LNG terminal is on track to become Vietnam's first LNG regasification project when it starts operations in 2021, outpacing state-owned PV Gas's Thi Vai terminal that will start up in 2022 in the same province.

They will make Vietnam the next Asian country to join the LNG importers' club, after Myanmar started deliveries in June. Other LNG importers in Southeast Asia are Thailand and Singapore; Malaysia, Indonesia and Brunei are mainly exporters although Malaysia also imports LNG, and Philippines is planning its first terminal.

It was not clear how long Hai Linh's test run will take but the project was expected to be put into operation in 2021, the source said. The terminal is expected to have an initial capacity of 2 million–3 million mt/year, with the potential to expand to 6 million mt/year.

Hai Linh will supply natural gas to its Hiep Phuoc thermal power plant in Ho Chi Minh City. It is also in talks to supply gas to state-owned power producer Vietnam Electricity, or EVN's power plants.

LNG terminals can take several months to start operations as they have to finalize commercial supply agreements with downstream consumers, and operational pipeline and shipping infrastructure.

Hai Linh has not finalized major issues like gas supply and selling price with EVN, the source said, adding Hai Linh was still negotiating LNG purchase contracts and preferred LNG producers instead of intermediaries like traders.

Vietnam's government approved the addition of the Hai Linh LNG project to its gas industry master plan in May 2018, to supply power plants and industrial customers in the southern region.

Hai Linh had awarded construction firm Lilama 18 a contract to build three LNG storage tanks with total capacity of 219,000 cubic meters at Cai Mep Industrial Park.

Hai Linh imports oil products and operates product storage capacity near its LNG terminal, and was awarded a project to build a 10 km gas pipeline and gas distribution center in the port city of Phu My city in February 2020.

Its 375-MW Hiep Phuoc power plant is connected to a natural gas pipeline from the Nam Con Son basin to Ho Chi Minh City. There are plans to expand it to 1,200 MW with LNG feedstock.

Hai Linh's contact information was not publicly available.

PV Gas, the natural gas arm of national oil company PetroVietnam, began construction of its Thi Vai LNG terminal in the same province in October 2019. It plans to have 1 million mt/year capacity under its first phase ready in 2022 and previously expected to be Vietnam's first LNG terminal.

Like most Asian countries, Vietnam's domestic gas production is in sharp decline, necessitating the import of LNG to feed growth in power generation capacity from less than 50 GW currently to around 130 GW by 2030.